Rayonier Inc. (RYN)

This is what DA Davidson had to say about Rayonier (RYN+1.3%) the day after the company had to restate results and said it had been harvesting above sustainable levels for years: "Confidence in story (not management) shaken... the near term optics look bad, and we think it’s perhaps premature to get positive on the stock despite today’s 15% decline."

Given a few days to think it over, the team now spots value in the stock (after its 20% decline) and upgrades to Buy from Neutral.

Rayonier this afternoon released a new investor presentation. Next year's sales are expected in the area of $575M vs. $590M-$600M in 2014, with adjusted EBITDA of $200M-$220M vs. $238M-$242M this year.

Down alongside Rayonier (RYN-15.3%) - which earlier was restated results lower from this year's first half and cut the dividend as it plans to lower harvests and stop selling nonstrategic land to raise cash - is recently spun off Rayonier Advanced Materials (RYAM-6.9%).

The management team which looks to have botched the first half doings at Rayonier is now running Rayonier Advanced Materials.

Pro forma net income of $10M or $0.08 per share vs. $23M and $0.17 one year ago.

Forest Resources: Q2 sales of $101M down from $109M. Operating income of $22M up a hair.

Real Estate: Q2 sales of $34M up from $13M, and operating income of $28M up from $22M. The big boosts are the result of a sale of 19.5K acres of non-strategic timberland.

Outlook: Results from timberland in the South will be above prior year as demand improves, but in the Pacific Northwest and New Zealand, lower prices in H2 thanks to higher log inventories in China will hurt numbers. The bottom line: Forest Resources full-year results will be modestly below prior guidance. In Real Estate, 2014 should be comparable to 2013.

Forest Resources sales of $105M and operating income of $28M, up $48M and $14M, respectively a year ago.

Real Estate sales of $6M and operating income of $1M, fell $19M and $16M, respectively from one year ago, with management blaming lower traffic due to the weather as well as the timing of closings.

Performance Fibers sales of $242M and operating income of $49M, fell $42M and $43M, respectively from one year ago. Management notes the planned extended annual outage of the Jesup mill as well as previously announced lower cellulose specialties prices, rough weather, and boosted manufacturing costs.

Spinoff of Performance Fibers unit - to be named Rayonier Advanced Materials - is on track for middle part of this year.

Rayonier (RYN-4.4%) full year outlook: Forest Resources results should surpass 2013, while Real Estate is expected to be comparable over the full year. Performance Fibers is expected to fall short of 2013 thanks to higher Q1 costs.

The tax-free spinoff of Raynoier's (RYN) performance fibers business from the forest resources and real estate operations will result in two independent, publicly traded companies.

"With an improving U.S. housing market, strong timber export markets, and the successful expansion of our cellulose specialties capacity, we concluded that now is the optimal time to pursue the separation of these two non-integrated businesses," says CEO Paul Boynton. “While these businesses have historically provided Rayonier with balance and financial strength, the company has evolved into two distinct businesses and investment opportunities."

Rayonier's (RYN-11.3%) post-earnings slide from yesterday picks up steam amid three downgrades. Bank of America and Raymond James remove their Buy ratings on the stock, while Deutsche cuts to Sell with price target reduced to $47 from $55.

"Significant downside risk is ahead" in the cellulose specialties business (accounts for 72% of segment EBIT), writes Deutsche analyst Mark Wilde, after management's remarks on the earnings call about recent contract negotiations. "Pick-up in timber and real estate markets may mitigate some downside pressure on stock, but they won’t eliminate it."

Rayonier Inc is an international forest products company. It is engaged in activities associated with timberland management, sale and entitlement of real estate, and production and sale of high value specialty cellulose fibers.